Nardelli's quest for redemption

Bob Nardelli is not everyone's cup of tea. But running Chrysler -- from inside a private equity firm -- may be the perfect platform for a man in search of rehabilitation, writes
Fortune's Jennifer Reingold.

(Fortune Magazine) -- Every business cycle has its symbols of excess. There was "Chainsaw Al" Dunlap, who personified the slash-and-burn mentality of the late 1990s. There was Jack
Grubman, the onetime analyst who embodied Wall Street arrogance -- and avarice -- during the dotcom years.

And then, cast in the role of Imperial CEO, there was Bob Nardelli, who in January was pushed out of The Home Depot (Charts, Fortune 500) amid shareholder outrage over his $210 million pay package and
the quality of customer service at the stores.

As Chrysler CEO, Bob Nardelli has a chance to turn his battered legacy around.

So to see him reappear -- at Chrysler, of all places -- seems, at first glance, a shocking move. Why plant such a lightning rod at a company that's had a storm cloud hanging over it
for so long, especially at a time of delicate interactions with the UAW?

But Nardelli has always had many more dimensions than recent reports suggest. And a close look at him and his background indicate that this move is so crazy that it just might work.

Let's start with the fact that Nardelli wasn't a genius at making stock prices move -- Home Depot's remained stagnant for his six-year tenure. But in a private company, that's no
longer relevant.

What Nardelli was terrific at was boosting revenue and earnings: At General Electric
(Charts, Fortune 500), Nardelli took GE Power Systems from a money-losing $5 billion
unit, to one with $20 billion in revenues and almost $3 billion in profits.

Lost in the hoopla about his admittedly obscene pay package is the fact that Home Depot needed drastic change -- and that's exactly what Nardelli delivered.

He helped to modernize a woefully low-tech company, took on an ambitious new growth strategy with the professional supply business, and basically doubled revenues and profits. It's
safe to say no one would complain about those numbers if they appeared at Chrysler.

"He is one of the great operators of American business," says Jack Welch, who was CEO of GE when Nardelli worked at the company. "I think it's a brilliant move by Cerberus."

It is true that Nardelli is not a car guy, or even an American car guy (at today's press conference, he waxed rhapsodic about his first car, a Dodge Dart GT. Yet when I last saw
him, in 2005, he was driving an Audi and a Lexus). But his outsider status may prove to be a strength, as it so far has for Alan Mulally at Ford (Charts, Fortune 500).

Nardelli didn't know much about ceiling fans when he started at Home Depot, either, but when I last met with him he knew so much about the blades themselves that my eyes almost
glazed over. And that was only one of the millions of products Home Depot offered.

Where Nardelli was weakest was in dealing with the regular folks at Home Depot, the managers who ran their own stores -- for better or for worse -- their way. That could be a
problem with the unions, but if Chrysler president Tom LaSorda continues to be the point person in labor talks, that may not matter much.

Even if Nardelli is thrust into union negotiations, he may well hold his own. "He was fantastic with the unions," says Welch of Nardelli's record at GE (Home Depot doesn't have
unions). "He built a great relationship with them. We always got a positive vote [in units he managed]."

Finally, Nardelli's tin ear when it comes to shareholders won't be a problem now that he's running a privately-held company. He'll be able to focus solely on fixing the business and
-- hopefully -- will leave some of the public relations stuff to others.

Don't get me wrong: The selection of Nardelli is still a risky and controversial choice. If he pulls it off, his legacy will no longer be as an imperious boss, but as one of the
best business leaders of his time. If not, this pick may be the symbol of yet another era -- private equity's hastening of the downfall of an American icon. No pressure, Bob.